Home Jersey sale Interim report January – September 2022

Interim report January – September 2022

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Sinch AB

July – September 2022

  • Net sales increased by 83% to SEK 7,196 million (3,938).

  • Gross profit increased by 164% to SEK 2,361 million (896).

  • EBITDA increased by 416% to SEK 808 million (157).

  • Adjusted EBITDA1 increased by 202% to SEK 901 million (298).

  • The post-tax loss for the quarter amounted to SEK -4,765 million (266) and was impacted by a non-cash goodwill impairment of SEK -5,000 million.

  • Basic earnings per share were SEK -5.69 (0.37) and diluted earnings per share were SEK -5.48 (0.36).

  • Cash flow from operating activities was SEK 727 million (-491).

January – September 2022

  • Net sales increased by 86% to SEK 20,361 million (10,970).

  • Gross profit increased by 147% to SEK 6,394 million (2,585).

  • EBITDA increased by 296% to SEK 1,984 million (501).

  • Adjusted EBITDA1 increased by 154% to SEK 2,165 million (851).

  • The post-tax loss for the period amounted to SEK -4,717 million (454) and was impacted by a non-cash goodwill impairment of SEK -5,000 million.

  • Basic earnings per share were SEK -5.81 (0.63) and diluted earnings per share were SEK -5.44 (0.62).

  • Cash flow from operating activities was SEK 1,535 million (-143).

“I am pleased to see that increased cost control is now translating into improved profitability and stronger cash flow.”

– Johan Hedberg, interim CEO

Highlights of the quarter

  • Sinch announced on July 20 that CEO Oscar Werner was stepping down effective immediately. The board appointed Johan Hedberg as interim CEO and began recruiting a new CEO. Johan Hedberg is one of the founders of the company.

  • Sinch announced on August 31 that Paul Perrett, president of the SMB (small and medium-sized business) business unit, had decided to step down. Damien Tabor, Chief Financial Officer of the SMB Business Unit, will serve as interim President of the Business Unit until the recruitment of a permanent replacement is complete.

  • Sinch announced Sept. 29 that SoftBank was selling its entire c.5% stake in Sinch to Neqst D2 and co-founder/interim CEO Johan Hedberg.

  • Goodwill impairment tests resulted in a total impairment of SEK 5,000 million. The impairment relates to Pathwire, a company acquired by Sinch in 2021, which was later accounted for in the Email segment. The impairment will reduce Sinch’s earnings for the third quarter but will not affect cash flow.

  • During the quarter, maturities were extended to 2024 for term loans of SEK 3,000 million.

Important events after the end of the quarter

  • On October 14, Sinch announced that Sean O’Neal had been named the new president of the SMB business unit and that Brett Scorza had been named president of the Voice business unit upon Ed O’Hara’s retirement. At the same time, Sinch also announced that the Applications Business Unit would be reorganized to focus on interactive messaging initiatives and that Business Unit President Eduardo Henrique had elected to leave Sinch.

  • Also on October 14, Sinch provided further details on the previously disclosed cost-cutting program. The program aims to achieve total gross savings of at least SEK 300 million on an annual basis through reduced consultancy costs, non-staff costs and staff reductions. The workforce reductions will affect around 150 people. Total restructuring costs are estimated at SEK 120 million, most of which is expected to be charged to earnings in the fourth quarter.

  • Sinch presented preliminary financial results and goodwill impairment related to Q3 2022 on October 20.

1 Adjusted EBITDA is reported to clarify the performance of the underlying operations. See Note 2.

Invitation to webcast and conference call

Sinch will present the interim report via webcast and conference call on Wednesday, November 2 at 2:00 p.m. CET. Watch the presentation on investors.sinch.com/webcast or call and register a few minutes in advance.
Sweden: +46 8 5051 6386
UK: +44 20 3198 4884
USA: +1 412 317 6300
Access code: 033 5637#

For more information, please contact
Ola Elmeland
Investor Relations
Mobile: +46 721 43 34 59
E-mail: [email protected]

Thomas Heath
Director of Strategy and Head of Investor Relations
Mobile: +46 722 45 50 55
E-mail: [email protected]

Roshan Saldanha
Financial director
Mobile: +46 73 660 24 19
E-mail: [email protected]

About Sinch

Sinch’s leading cloud communications platform enables businesses to reach everyone on the planet, in seconds or less, via mobile messaging, email, voice and video. More than 150,000 businesses, including many of the world’s largest enterprises and mobile carriers, use Sinch’s advanced technology platform to engage with their customers. Sinch has been profitable and growing rapidly since its founding in 2008. It is headquartered in Stockholm, Sweden, and has a local presence in over 60 countries. The shares are traded on NASDAQ Stockholm: XSTO:SINC. Visit us at sinch.com.

Note: Sinch AB (publ) is required to publish the information contained in this interim report in accordance with the EU Market Abuse Regulation and Swedish securities market law. The information was posted for publication by the above contact person on November 2, 2022 at 07:30 CET.

This report is published in Swedish and English. In case of discrepancies between the English version and the original Swedish text, the Swedish version will apply.

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